In a renewed effort to protect Nigerian investors, the Securities and Exchange Commission (SEC Nigeria) has issued a stern public advisory warning against the rising threat of fraudulent investment schemes, including unregistered digital asset platforms.
In a statement released on April 24, 2025, the Commission emphasized the urgent need for investors to exercise caution and conduct thorough due diligence before committing their funds, particularly in sectors like cryptocurrency, forex trading, and blockchain-based investments.
SEC Highlights Growing Risks in Nigeria’s Digital Asset Space
The SEC expressed deep concern over the increasing number of entities falsely promising high, guaranteed returns with little to no risk, a classic hallmark of Ponzi schemes and fraudulent financial offers.
“These include unregistered platforms offering cryptocurrency investments, forex trading, or blockchain-based schemes, which operate outside regulatory frameworks and lack approval from the SEC,” the Commission stated.
The regulator strongly warned that investment opportunities sounding “too good to be true” almost certainly are, and urged Nigerians to verify the legitimacy of financial service providers through the Commission’s official database at sec.gov.ng/cmos .
New Legal Backing Under the Investments and Securities Act, 2025
Citing the newly enacted Investments and Securities Act, 2025, the SEC noted that the legal framework has tightened significantly against operators of unlicensed financial schemes.
Section 196(3) of the Act criminalizes the promotion and management of unregistered investment activities, making offenders liable to:
- A fine of not less than ₦20 million,
- A prison term of up to 10 years, or
- Both penalties upon conviction.
The Commission reiterated that these measures are critical for safeguarding the integrity and stability of Nigeria’s capital markets, which have been increasingly exposed to risks from the fast-evolving digital finance landscape.
Delay in Licensing New Crypto Startups Under ARIP
Despite initial momentum in onboarding digital asset companies into the regulatory framework through the Accelerated Regulatory Incubation Programme (ARIP), the SEC has recently paused the issuance of new provisional licenses.
According to SEC Director General Emomotimi Agama, this delay is due to the necessity for enhanced due diligence to ensure that startups meet rigorous compliance standards.
Agama reaffirmed that the Commission remains committed to a transparent and inclusive regulatory environment but emphasized that investor protection remains paramount.
Public Concerns Heightened After CBEX Scandal
The latest warning from the SEC comes in the wake of mounting public outrage over CBEX, a digital asset trading platform that allegedly scammed investors.
CBEX operated without any verified presence across mainstream social media or official platforms, yet managed to lure unsuspecting individuals by advertising unrealistic investment returns. Eventually, the platform collapsed, leaving many investors with substantial financial losses.
The SEC’s advisory aims to prevent similar incidents by encouraging the public to verify the registration status of platforms and avoid deals that promise abnormal profits without risk.
The Bottom Line for Nigerian Investors
Nigeria remains one of Africa’s most active crypto markets, but this vibrancy comes with heightened risks. As fraudulent investment schemes continue to evolve, the SEC is urging the public to stay informed, verify, and only engage with licensed financial institutions.
The regulatory body also called on all operators within the digital asset sector to prioritize full compliance with Nigerian laws or face severe penalties.
